IM Inside Edge
Welcome to approximately 60 seconds of reading Mike
ODriscolls take on this weeks news highlights
in the industrial minerals world.
Imerys: bauxite, kaolin
Remember, remember the fifth of November is
Englands way of recalling Guy Fawkes plot to blow
up King James I of England and IV of Scotland at the State
Opening of Parliament in 1605.
Well, those that spotted the expansive five and half lines
buried in page 2 of Imerys nine-month
financial report may now remember the date for other reasons:
the acquisition of Goonvean, the UKs
sole remaining independent kaolin producer, and the acquisition
from Vale of MSL Minerais
Brazils former refractory
Both moves by Imerys make total sense, perhaps its
just surprising how long it has taken to come to fruition.
Although Goonvean reacted smartly to the disastrous impact
on traditional kaolin markets worldwide in recent years (ie.
paper, ceramics) by pursuing niche speciality markets for
kaolin (eg. adhesives, coatings), as reported in July 2011, clearly this
wasnt enough and Goonvean was unable to roll with the hit
as could the bigger players such as Imerys and Sibelco.
On the bauxite front, given the intense interest in
aluminosilicates from the refractories and latterly proppants
markets owing to limited supply sources and dominance by China,
I have found it astonishing that the Pará bauxite
reserves and former assets of MSL Minerais have not been
acquired by anyone sooner. MSLs last shipment was
December 2003 then operations ceased.
Sure, the ex-CAEMI reserves and two rotary kiln operation of
145,000 tpa capacity in Almeirim is in the thick of the
Pará jungle near the mouth of the Amazon. And yes, the
refractory bauxite grade was a touch high on silica content.
But as an alternative to the only two other sources in the
world China and Guyana (now Chinese
owned!) it was the only game in town, and it had demand
in some niche refractory applications. Why has it been ignored
The news will certainly give First Bauxites
development of its Guyana bauxite the hurry up, and with
Imerys recent enthusiasm for penetrating the ceramic
proppants market (new plant in Georgia ramping up now) it will
be interesting to see how it utilises the MSL bauxite
check the positive vibes coming out of Argentina and Brazil on
the outlook for shale gas and oil plays.
Just to note RHI was bang on schedule
with worlds largest fused magnesia plant in Norway at
85,000 tpa: now 100% self-sufficient on FM, and crucially, no
need for Chinese imports. Watch out for Magnezits
unrolling of its FM expansions in Satka and Razdolinsk which
would make it the worlds largest FM producer.
A thought: with all this captive FM capacity coming on line,
as/when the respective in-house FM demand drops, will stocks
get sold on to the world market? How will Chinese FM exporters
react to that?
China, US: plus ça
And finally, a week of drama at the top of the two economic
superpowers China and the US. Obama is confirmed back in the
White House while in all likelihood China will welcome Xi
Jinping as president when the 18th Communist Party
Congress ends next Wednesday. Will anything change?
Each have their respective economies at the top of their
agendas, and any policy change will affect industrial mineral
markets. Look out for impact on energy strategies (shale gas, electric
vehicles, solar, wind power) and reform in trade policies.
On a side note, China is consistent with its highly educated
leadership strategy: Xi Jinping is a chemical engineer, and is
expected to replace Hu Jintao as president, trained in
Wen Jiabao, premier, trained in geomechanics, will step down
and is expected to be replaced by Li Keqiang, holding a PhD in
economics and master's and bachelor's degrees in law.
So this time economics on equal footing with science among
Chinas top leaders, perhaps an acknowledgement for the
demands for economic reform.
And of Hus parting warning of the corruption endemic
in China requiring urgent attention a farewell to
mineral smuggling circumventing the ailing export licence
system, itself likely to experience radical change in 2013?
Mike ODriscoll is Global
Head of Research and Consultant Editor at Industrial Minerals,
previously he was Editor of IM 1995-2012.
+44 20 7827 6444; firstname.lastname@example.org